We have been following on www.insurereinsure.com various decisions that concern whether state laws that bar enforcement of arbitration agreements in insurance or reinsurance contracts are preempted by the Federal Arbitration Act (the “FAA”).  As noted here (insert link to Dec. 29th post), the U.S. Supreme Court recently declined to review the Fifth Circuit’s holding that the Convention on The Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), implemented by the FAA, preempts and supersedes Louisiana state law precluding enforcement of arbitration agreements. …
Read More Oklahoma Federal Court Declares Arbitration Clause in Insurance Contract Unenforceable, Not Preempted by the FAA

The FDIC brought suit last week against the directors and officers of a bank in FDIC receivership, in what appears to be the implementation of a strategy it announced earlier this year to recover up to $2.5 billion in damages caused by bad loans. …
Read More FDIC Brings Suit Against Defunct Bank’s Directors and Officers, Part of Larger Effort to Recover on Bad Bank Loans

A New York appeals court recently dismissed one of two lawsuits filed against MBIA Inc. (“MBIA”) by more than a dozen major financial institutions concerning the bond insurer’s financial restructuring.  The plaintiffs – owners of insurance policies issued by MBIA for structured finance products, including residential mortgage-backed securities – claimed that the bond insurer’s split into two units was intended to defraud policyholders. …
Read More New York Appeals Court Dismisses Suit Against MBIA Inc. Over Bond Insurer’s Financial Restructuring

The Federal Trade Commission (the “FTC”) recently released a preliminary staff report entitled Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers, proposing a normative framework for company protection of consumers’ privacy (the “Proposed Framework”).  The Proposed Framework is intended to inform policymakers as they develop solutions, policies and potential laws governing privacy. …
Read More FTC Requests Comment on Privacy Framework

Massachusetts Governor Deval Patrick has signed H.960 into law.  The legislation permits commercial property carriers to exclude coverage for fire damage that follows from an act of terrorism, directly or indirectly. …
Read More New Massachusetts Law Permits Property Carriers to Exclude Terrorism-Caused Fire Loss

On January 7, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule to establish a value-based purchasing (VBP) program to reward hospitals for providing safe, high-quality care. The program would provide higher reimbursements to hospitals performing well on quality measures relating to both patient experience and clinical process of care, or to hospitals making performance improvements in those areas. …
Read More Healthcare News from Capitol Hill and the Department of Health and Human Services – January 24, 2011

In OneBeacon America Insurance Co. v. Swiss Reinsurance America Corporation, 09-CV-11495-PBS (D.Mass. December 23, 2010), a motion was brought by petitioner OneBeacon to vacate an arbitration award on the basis that the arbitrators were guilty of misconduct for refusing to permit necessary discovery and hear certain evidence. The main issue in the arbitration itself concerned contract interpretation, but OneBeacon relied upon industry custom and practice to support its case. …
Read More Massachusetts Federal Court Addresses Manifest Disregard of the Law Standard, Finds that Panel’s Decision to Limit Discovery and Witness Testimony did not Provide a Basis to Vacate Award

In Columbia Casualty Co. v. Gordon Trucking Inc. et al., No. 09-CV-05441, 2010 WL 5141865 (N.D. Cal. Dec. 13, 2010), a truck owned by the insured was involved in a severe car accident. The insured had a $5 million primary policy, a $5 million first layer excess policy, a $20 million second layer excess policy, and a $20 million third layer excess policy. After its initial claim review, the first layer excess carrier told the insured that it did not believe its layer would be impacted by the underlying personal injury suit arising from the car accident. …
Read More Excess Insurer Required to Show Actual Prejudice to Avoid Paying Settlement it did not Consent to

We recently blogged about the Second Circuit’s decision in Arrowood Surplus Lines Ins. Co. v. Westport Ins. Corp., No. 10-cv-0397 (2d Cir. 2010), in which an appellate panel held that a reinsurer had no obligation to indemnify its cedent for losses outside the scope of the treaty at issue.  Click here to review a copy of that blog post.
Read More Second Circuit Denies Cedent’s Motion for a Rehearing in Follow the Fortunes Case

The European Insurance and Occupational Pensions Authority (EIOPA) held its first meeting on 10 January 2010 and promptly elected its management board and selected Gabriel Bernardino as its first Chairperson. See our previous blog on the new European supervisory bodies here. …
Read More EU: European Insurance and Occupational Pensions Authority (EIOPA) Launched